The goal of this proposal is to reveal molecular mechanisms by which inductive signals specify particular cell fates in mammalian development. Understanding the basis for cell type specification from progenitor cells is fundamental to organogenesis, regenerative responses to injury and disease, and stem cell biology. We have established the embryonic endoderm as an experimentalsystem for revealing how tissue- specific regulatory factors are induced and new chromatin states are established that initiate cell type specification. The embryonic endoderm gives rise to the liver, pancreas, lungs, thyroid, and intestine. In a previous grant period, we showed that FGFand BMPsignaling coordinatelyinduce a hepatic fate in foregut endoderm cells. In the past grant period, we developed a foregut endoderm fate map, allowing us to prospectively investigate molecular inductive processes in progenitor cells in the hours that precede hepatic specification. We also discovered that hepatic induction occurs in two spatially and functionally distinct populations of endoderm cells. The means by which general FGFand BMPsignals induce liver genes and transcription factors in particular endoderm domains, and thereby a liver fate, are unknown and are the subject of this proposal. We developed new genetic probes and scaled-down biochemical assays of undifferentiated endoderm cells, allowing us to investigate signaling, transcriptional, and post- transcriptional mechanisms by which a liver cell fate is specified, with the following specific aims: 1. To use genetic and biochemical probes to reveal FGFand BMPresponse pathways in endoderm cells that induce the earliest three liver transcription factors, thereby eliciting hepaticdifferentiation. 2. To determine whether the induction of hepatogenic transcription factors in endoderm cells is elicited at the transcriptional or post-transcriptional level, and the underlying mechanisms. 3. To understand the means by which distinct embryonic progenitor cells activate similar genetic programs in descendant cells, and the functional implications for the different progenitors'descendants. The findings will apply to diverse developmental contexts and adult pathologies, and enable rational approaches to differentiate proeenitor and stem cell populations for cell-based tissue therapies and research.